Monday, November 4th, 2019


Give or take a trillion: Investors still in the dark on Saudi Aramco value

NOVEMBER 4 — Saudi Aramco’s blockbuster listing remained shrouded in mystery today, a day after the company finally announced its plans, with scant details disclosed and expert valuations varying wildly from around US$1.2 to US$2.3 trillion. The…

Cloudy export outlook for fourth quarter

PETALING JAYA: Exports performance for the fourth quarter is likely to be weak in the fourth quarter (Q4) of the year after September’s exports saw the biggest decline in the past three years.

Exports slipped 6.8% year-on-year (yoy) to RM77.7 billion in September 2019, mainly dragged down by electrical & electronic (E&E) products (-RM4.1 billion).

Imports, however, registered an increase of 2.4% yoy to RM69.4 billion. Total trade was down 2.7% yoy to RM147.1 billion, while trade surplus shrank 46.5% yoy to RM8.3 billion.

In a report today, MIDF Research expects exports to be “quite vulnerable” with the uncertainty over trade tensions, coupled with higher base effect particularly in October 2018 would influence the overall performance in Q419.

The research house said 2019 is a contraction for exports and imports. For the first nine months of the year, exports growth averaged at -1.1% yoy. In term of absolute value, monthly average of 2019 so far recorded at RM80.9 billion which is still lower than RM83.7 billion in 2018.

“In fact, we expect further drop in exports growth in October 2019 due to high base effect factor. In addition, continuous decline in imports of capital and intermediate goods indicate weak prospects for future exports.”

Nevertheless, it expects commodity-based sector products particularly LNG exports to offset the less favourable impact from trade war in 2H19.

UOB Research also remains cautious on the export outlook over the next few months and into 2020 with leading indicators still pointing to subdued external demand and slowing global growth.

“Although the US and China are expected to sign a “Phase 1” trade deal this month, there is still a long way towards full resolution with an array of outstanding issues including technology transfer and intellectual property rights. Thus, we maintain our 2019 full-year exports forecast at -1.0%,“ it said.

Chief statistician Malaysia Datuk Seri Dr Mohd Uzir Mahidin said besides E&E products, other products which attributed to the decline in exports were crude petroleum (-RM1.2 billion), refined petroleum products (-RM805.1 million), palm oil and palm oil-based products (-RM366.9 million), liquefied natural gas (-RM61.5 million) and natural rubber (-RM14.7 million).

However, timber and timber-based products increased RM101.5 million.

Meanwhile, the increases in imports by end use was mainly attributed to intermediate goods (+RM4.0 billion) followed by consumption goods (+RM777.0 million) and capital goods (+RM531.7 million).

Re-exports was valued at RM12.7 billion, registering a decline of 17.6% yoy and accounted for 16.3% of total exports. Domestic exports also declined 2.9% to RM65.0 billion.

In Q3 of 2019, exports fell 1.9% yoy to RM247 billion. Imports also registered a decrease of 5.8% yoy to RM213.5 billion.

Re-exports was valued at RM44 billion, decreasing 9.2% yoy and accounted for 17.8% of total exports. Domestic exports decreased marginally 0.2% to RM203 billion from a year ago.

DRB-Hicom plans up to RM3.5b Sukuk Wakalah programme

KUALA LUMPUR, Nov 4 — DRB-Hicom Bhd has proposed an Islamic medium terms notes (Sukuk Wakalah) programme of up to RM3.5 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar with the tenure of up to 30 years. In a filing…

IT segment pushes up ARB’s Q3 earnings by 44 times

PETALING JAYA: ARB Bhd’s net profit for the third quarter ended Sept 30, 2019 jumped over 44 times to a record high of RM8.29 million from RM186,000 a year ago, mainly thanks to the information technology (IT) segment.

The group’s revenue also rose eight times to RM33.94 million compared with RM3.8 million.

For the nine-month period, ARB’s saw a net profit of RM21.98 million versus a net loss of RM734,000 a year ago, while revenue rose almost seven times to RM57.65 million from RM8.34 million.

ARB said the main revenue contribution from the timber segment is temporarily ceased during the quarter and is expected to resume in December 2019.

For the IT segment, the group’s wholly owned subsidiary ARB Development Sdn Bhd secured a US$20 million (RM83 million) contract with an overseas client in the third quarter of 2019.

“The group believes that there would be more potential and interested clients to be engaged in the future.”

ARB CEO (Investment & Technology) Datuk Larry Liew Kok Leong said the group’s IT business is in line with the strong growth in Industry Revolution 4.0 and Internet of Things.

“The prospects of this industry are cemented by the government of Malaysia through its Budget 2020, whereby the government is committed to providing support and grants to help businesses achieve automation and digitisation, further enabling access to innovations and disruptive technologies.”

“For our another core business – enterprise resource planning (ERP), we believe this is the platform/solution that will be much sought after in the near future. We see the trend of businesses starting to realise that using ERP systems is highly effective in improving productivity and allowing employees/business owners to operate at a much more efficient level,” he added.

ARB expects the IT segment to continue to contribute to the major portion of the group’s sales and profits.

On Bursa close today, ARB’s share price close half a sen higher at 37.5 sen on 52.67 million shares done.

China says no ‘promise fatigue’ on opening its economy

BEIJING, Nov 4 — There is no “promise fatigue” about China’s efforts to open its economy to foreign businesses, the government said today on the eve of week-long import fair, after the European Union said China needed to make rapid and…

Mothercare puts British stores into administration

LONDON, Nov 4 — Britain’s children and baby products retailer Mothercare said today it was putting its loss-making UK business into administration at a risk of more than 2,000 jobs. The 58-year-old global brand’s 79 British stores have been…

Bursa Malaysia ends at day’s high on last-minute heavyweight buying

KUALA LUMPUR: Bursa Malaysia rose 0.64% to end at the day’s high on the back of consistent buying in index-linked counters at the eleventh hour.

At 5pm, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) was up 10.22 points at 1,603.56 compared with Friday’s close of 1,593.34.

The key index opened 4.94 points higher at 1,598.28, which was also the intra-day low.

An analyst said this was in line with the positive market sentiment both locally and globally, which had pushed the local bourse to break through its immediate resistance level of 1,600.

On the broader market of Bursa Malaysia, gainers outnumbered losers 451 to 361, while 410 counters were unchanged, 738 untraded and 28 others suspended.

Volume expanded to 2.5 billion shares worth RM1.85 billion from 2.3 billion shares worth RM1.91 billion last Friday.

The biggest gainers among the heavyweights included Petronas Chemicals, which climbed 14 sen to RM7.62 and added 1.97 to the FBM KLCI, while Tenaga Nasional rose 12 sen to RM14.00, contributing 1.20 to the index.

Among the other heavyweights, Kuala Lumpur Kepong was up 28 sen at RM21.98, while Digi and Dialog both added three sen to RM4.71 and RM3.50, respectively.

An analyst said the index’s movement was in line with its regional peers which showed positive performance across the board.

“We can see that the index had a steady climb today from the opening, and interest spiked in the last 10 minutes of trading, witnessing an incremental jump on the KLCI from 8.06 to 10.22.

“We expect the momentum will continue as it has surpassed its resistance level, backed by the upbeat global market environment,” she said.

As at 5pm, the Dow Jones Industrial Average was 1.11% higher at 27,347.36, Singapore Straits Times rose 0.20% to 3,235.73, Hong Kong’s Hang Seng was up 1.65% to 27,547.30 while South Korea’s KOSPI inched up 1.43% to 2,130.24.

Among the actives, Sapura and ARB both gained half-a-sen to 26.5 sen and 37.5 sen, Prestariang added one sen to 52.5 sen, while IFCA MSC increased 4.5 sen to 54.5 sen.

The FBM Emas Index was 71.88 points stronger at 11,352.01, the FBMT 100 Index improved 74.02 points to 11,126.70, and the FBM Emas Shariah Index expanded 103.88 points to 11,928.26.

Meanwhile, the FBM Ace advanced 48.62 points to 5,028.05 and the FBM 70 enlarged 104.98 points to 14,044.90.

Sector-wise, the Financial Services Index added 5.32 points to 15,579.99, the Industrial Products & Services Index edged up 1.40 point to 154.59, and the Plantation Index earned 87.74 points to 6,836.78.

Main Market volume narrowed to 1.77 billion shares worth RM1.65 billion from 2.05 billion shares worth RM1.47 billion last Friday.

Warrants turnover, meanwhile, increased to 289.75 million units valued at RM49.84 million from last Friday’s 276.73 million units valued at RM43.23 million.

Volume on the ACE Market rose to 488.57 million worth RM148.06 million from last week’s 466.39 million units worth RM124.56 million.

Consumer products and services accounted for 292.56 million shares traded on the Main Market, industrial products and services (298.60 million), construction (134.34 million), technology (178.38 million), SPAC (nil), financial services (37.97 million), property (145.80 million), plantations (39.52 million), REITs (71.94 million), closed/fund (4,000), energy (473.60 million), healthcare (30.98 million), telecommunications and media (86.28 million), transportation and logistics (40.26 million) and utilities (12.97 million). — Bernama

Greece says Juneyao Air Co to launch Athens-Shanghai flights in July

ATHENS, Nov 4 — Chinese airliner Juneyao Air Co will launch direct flights connecting Shanghai to Athens in July, Greece’s tourism ministry said today. Juneyao and Greece have signed a deal on the new route during a three-day visit by Greek…

Asian markets rally on strong US jobs data, trade optimism

HONG KONG, Nov 4 — Asian markets rallied today following a forecast-busting US jobs report, and on growing optimism that China and the United States will finally sign off on a mini trade pact. Investors took their lead from another record-breaking…

Decline in palm oil stocks prove efforts to increase exports successful : Teresa Kok

KUALA LUMPUR: The decline in Malaysian palm oil stocks is positive as it proves that the government’s efforts to increase palm oil exports have been successful, Primary Industries Minister Teresa Kok Suh Sim (pix) said today.

She said Malaysian palm oil exports recorded an increase of 19.7 per cent to 12.6 million tonnes for a period from January to August 2019, compared 10.53 million tonnes registered in the corresponding period last year.

“This will contribute to higher palm oil prices,” she said when responding to Datuk Seri Ismail Abd Muttalib’s (BN-Maran) question on her ministry’s effort in dealing with the decline in Malaysian palm oil stocks.

Malaysian palm oil stocks said Kok, was experiencing a downward trend this year from three million tonnes in January to 2.25 million tonnes in August 2019, while the current palm oil stocks level stood at 2.45 million tonnes on October 10, 2019, which was at the optimum level.

“In addition, the government has now suspended the export duties of crude palm oil (CPO) until December this year to address the situation of high palm oil stocks.

“The government is indeed trying to lower the level of palm oil stocks to an optimum level as the supply of palm oil earlier this year has been at a level that exceeded its demand of three million tonnes,” she added.

Her ministry said Kok, was working hard to reduce the palm oil stocks to stabilise the prices and increase revenue to the entire palm oil industry including smallholders.

“However, the Primary Industries Ministry will continue to monitor the country’s palm oil stocks so that they are at an optimum level to meet the current domestic market demand,” she said.

On the possibility of palm oil boycotts in India, Kok said her ministry would hold regular meetings and negotiations on the matter. — Bernama